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Wednesday, 22 June 1994
Page: 1867


Senator COONEY —My question is directed to the Minister representing the Treasurer. The minister will know that the Australian Chamber of Commerce and Industry and Westpac Banking Corporation have released their quarterly survey of industrial trends.


Senator Ian Macdonald —What have they said about interest rates?


Senator COONEY —Senator Macdonald has anticipated my question. To follow on from what Senator Macdonald said, what significance, in the government's view, do the results of the survey have for investment and for interest rates?


Senator COOK —I apologise for arriving a little late in the chamber. The bells only rang for a short time today. I arrived in time to hear—


Senator Ian Macdonald —Whingeing again.


Senator COOK —I am not whingeing, I am apologising for my late arrival. I heard Senator Hill say that we ought to be honest about the economy. The Australian Chamber of Commerce and Industry-Westpac survey is good economic news for Australia. It is the 131st survey of industrial trends and it will disappoint those opposite who only want to highlight and argue bad news and agitate along the line that bad news for the economy is good news electorally for them. But this is good news for the economy.

  The survey shows that the expectation in industry is for continued and strong economic growth in the economy. The survey finds that on all the indicators for the manufacturing sector—the levels of orders on the books, the increase in employment in this sector, the increase in output by this sector and the export orders undertaken by this sector—expectations and performance are up, and that all expect a rise in the June quarter of this year. The survey also shows, on quarter by quarter comparisons, that the growth in the June quarter compared to the March quarter is a little under the levels of the March quarter, but it is expected that the September quarter will rebound strongly again and will do as well as, if not better than, the growth percentages in the March quarter.

  Business confidence, as an indicator, is high; 61 per cent of the respondents to this survey of Australian business expect that conditions in the economy will continue to improve. The price pressures as uncovered by the survey are found not to be strong. This survey, over the last five quarters that it has been conducted, has shown an expectation by Australian business that there will be a price surge of some sort. None of those expectations have been realised over the last five quarters. The expectation here is that there will be some mild uptake in prices but, importantly, overall there will be significantly no pressure on prices compared to the levels of pressure on prices in the early 1990s and late 1980s. In other words, the expectation of this survey by the Australian manufacturing sector is that there will be very low inflation in the economy and that that will remain as a permanent feature of the economy. One thinks that that is in consort with what all of the other prognosticators of economic forecasting say about the future of the Australian economy.

  During Senator Cooney's question there was an interjection from Senator Macdonald asking what the survey said about interest rates. Perhaps I should answer that question. On releasing this survey the Chief Executive of the Chamber of Industry and Commerce, Mr Ian Spicer, was quoted as saying:

Australia remains in the midst of a non-inflationary period. The figures show that there is no need to raise official interest rates.

In other words, the Chamber of Commerce and Industry, the largest employer body in Australia and, dare I say it—I am sure it will not shrink from the tag—the most conservative as well and the one that is frequently the harshest critic of the government, is in fact saying that we are looking at a low inflation future in this country and that there is no need to raise official interest rates. That is in absolute accord with government policy.